BILL NUMBER: SB 1362	CHAPTERED  09/30/00

	CHAPTER   1085
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 30, 2000
	PASSED THE ASSEMBLY   AUGUST 25, 2000
	PASSED THE SENATE   MAY 31, 2000
	AMENDED IN SENATE   MAY 26, 2000
	AMENDED IN SENATE   APRIL 25, 2000
	AMENDED IN SENATE   APRIL 6, 2000
	AMENDED IN SENATE   MARCH 15, 2000
	AMENDED IN SENATE   FEBRUARY 23, 2000

INTRODUCED BY   Senators Poochigian, Johannessen, and Leslie
   (Coauthors:  Senators Costa, Dunn, Haynes, McPherson, Monteith,
Morrow, Peace, Rainey, and Solis)
   (Coauthors:  Assembly Members Alquist, Baldwin, Bates, Battin,
Bock, Brewer, Briggs, Campbell, Cardoza, Correa, Cox, Dickerson,
House, Maddox, Maldonado, Margett, Mazzoni, Olberg, Oller, Rod
Pacheco, Reyes, Runner, Strickland, Wiggins, and Zettel)

                        JANUARY 18, 2000

   An act to amend and repeal Section 205.5 of, to add Sections
276.1, 276.2, and 276.3 to, and to repeal and add Section 276 of, the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1362, Poochigian.  Disabled veterans' exemption.
   Existing property tax law provides, pursuant to the authorization
of the California Constitution, for the exemption from property
taxation of the home of a disabled veteran, or a veteran's spouse in
the case in which the veteran has, as a result of a service-connected
disease or injury, died while on active duty in military service.
Existing property tax law specifies an exemption amount of $40,000
and increases that amount to $100,000 in the case in which the
disabled veteran is completely disabled.  Existing law increases
these amounts to $60,000 and $150,000, respectively, if the exemption
claimant's income does not exceed an amount stated in a specified
statute.  Existing law also repeals the higher exemption amounts with
regard to totally disabled veterans as of January 1, 2001.
   This bill would, for purposes of an income threshold, substitute
an income level of $40,000 for the amount specified by a certain
statute.  This bill would provide for the annual adjustment of that
income level for inflation for the 2002 assessment year and each
assessment year thereafter.  This bill would also require the
exemption to be in the amount of $100,000, or in the amount of
$150,000 if the claimant's income does not exceed the adjusted income
threshold.
   Existing property tax law generally requires an affidavit for the
disabled veterans' exemption to be filed no later than the February
15 following the relevant lien date.  It also provides for partial
exemptions, each applicable as provided and contingent upon an
affidavit being no later than the December 10 following the lien
date, of the lesser of either certain amounts of assessed value or
80% of the full value of the real property to which the exemption is
to be applied.
   This bill would, subject to limitations periods, as set forth in a
specified statute, revise and recast current partial exemption
provisions to require the cancellation or refund of either 90% or 85%
of those taxes, including any interest and penalties, levied on that
portion of the property's assessed value that would have been
exempted under a timely exemption claim, depending upon whether a
claim is filed either within a specified period ending with the
December 10 following the lien date, or after that period.  This bill
would also make technical, nonsubstantive changes to provisions
regarding the application of the exemption to the 2nd installment of
taxes on the secured property tax roll.
   This bill would, if the exemption would have been available but
for the claimant not having received a disability rating from the
United States Department of Veterans Affairs, require the refund or
cancellation of taxes on that portion of the assessed value of the
property that would have been exempt under a timely and appropriate
affidavit, provided a claimant meets certain filing requirements.
   This bill would, in the case in which the subject real property
was only acquired after the property tax lien date, also require the
cancellation or refund of those taxes levied on the full exemption
amount or a prorated amount, provided an appropriate affidavit is
filed on or before the next property tax lien date.
   This bill would also provide for the termination of a disabled
veterans' exemption upon that subject property being transferred to a
3rd party that is not eligible for that exemption.
   This bill would incorporate additional changes in Section 205.5 of
the Revenue and Taxation Code, proposed by SB 2195, to be operative
only if SB 2195 and this bill are both chaptered and become effective
on or before January 1, 2001, and this bill is chaptered last.
   Section 2229 of the Revenue and Taxation Code requires the
Legislature to reimburse local agencies annually for certain property
tax revenues lost as a result of any exemption or classification of
property for purposes of ad valorem property taxation.
   This bill would provide that, notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
   This bill would take effect immediately as a tax levy.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 205.5 of the Revenue and Taxation Code, as
amended by Section 17 of Chapter 1087 of the Statutes of 1996, is
amended to read:
   205.5.  (a) Property that is owned by, and that constitutes the
principal place of residence of, a veteran is exempted from taxation
on that part of the full value of the residence that does not exceed
forty thousand dollars ($40,000), if the veteran is blind in both
eyes, has lost the use of two or more limbs, or is totally disabled
as a result of injury or disease incurred in military service.  The
exemption shall be sixty thousand dollars ($60,000) in the case of an
eligible veteran whose household income does not exceed the amount
of forty thousand dollars ($40,000), as adjusted for the relevant
fiscal year as provided in subdivision (g).
   (b) For purposes of this section, "veteran" means either of the
following:
   (1) A veteran as specified in subdivision (o) of Section 3 of
Article XIII of the Constitution without regard to any residency
requirement or limitation contained therein on the value of property
owned by the veteran or the veteran's spouse.
   (2) Any person who would qualify as a veteran pursuant to
paragraph (1) except that he or she has, as a result of a
service-connected injury or a disease that is service related as
determined by the United States Department of Veterans Affairs, died
while on active duty in military service.
   (c) (1) Property that is owned by, and that constitutes the
principal place of residence of, the unmarried surviving spouse of a
veteran is exempt from taxation on that part of the full value of the
residence that does not exceed forty thousand dollars ($40,000)
provided that either of the following conditions is met:
   (A) The deceased veteran during his or her lifetime qualified in
all respects for the exemption or would have qualified for the
exemption under the laws effective on January 1, 1977, except that
the veteran died prior to January 1, 1977.
   (B) The veteran died from a disease that was service connected as
determined by the United States Department of Veterans Affairs.
   The exemption shall be sixty thousand dollars ($60,000) in the
case of an eligible unmarried surviving spouse whose household income
does not exceed the amount of forty thousand dollars ($40,000), as
adjusted for the relevant assessment year as provided in subdivision
(g).
   (2) Property that is owned by, and that constitutes the principal
place of residence of, the unmarried surviving spouse of a veteran as
described in paragraph (2) of subdivision (b) is exempt from
taxation on that part of the full value of the residence that does
not exceed forty thousand dollars ($40,000).  The
forty-thousand-dollar ($40,000) exemption shall be sixty thousand
dollars ($60,000), in the case of an eligible unmarried surviving
spouse whose household income does not exceed the amount of forty
thousand dollars ($40,000), as adjusted for the relevant assessment
year as provided in subdivision (g).
   (d) As used in this section, "property that is owned by a veteran"
or "property that is owned by the veteran's unmarried surviving
spouse" includes all of the following:
   (1) Property owned by the veteran with the veteran's spouse as a
joint tenancy, tenancy in common, or as community property.
   (2) Property owned by the veteran or the veteran's spouse as
separate property.
   (3) Property owned with one or more other persons to the extent of
the interest owned by the veteran, the veteran's spouse, or both the
veteran and the veteran's spouse.
   (4) Property owned by the veteran's unmarried surviving spouse
with one or more other persons to the extent of the interest owned by
the veteran's unmarried surviving spouse.
   (5) So much of the property of a corporation as constitutes the
principal place of residence of a veteran or a veteran's unmarried
surviving spouse when the veteran, or the veteran's spouse, or the
veteran's unmarried surviving spouse is a shareholder of the
corporation and the rights of shareholding entitle one to the
possession of property, legal title to which is owned by the
corporation.  The exemption provided by this paragraph shall be shown
on the local roll and shall reduce the full value of the corporate
property.  Notwithstanding any provision of law or articles of
incorporation or bylaws of a corporation described in this paragraph,
any reduction of property taxes paid by the corporation shall
reflect an equal reduction in any charges by the corporation to the
person who, by reason of qualifying for the exemption, made possible
the reduction for the corporation.
   (e) For purposes of this section, being blind in both eyes means
having a visual acuity of 5/200 or less, or concentric contraction of
the visual field to 5 degrees or less; losing the use of a limb
means that the limb has been amputated or its use has been lost by
reason of ankylosis, progressive muscular dystrophies, or paralysis;
and being totally disabled means that the United States Department of
Veterans Affairs or the military service from which the veteran was
discharged has rated the disability at 100 percent or has rated the
disability compensation at 100 percent by reason of being unable to
secure or follow a substantially gainful occupation.
   (f) An exemption granted to a claimant in accordance with the
provisions of this section shall be in lieu of the veteran's
exemption provided by subdivisions (o), (p), (q), and (r) of Section
3 of Article XIII of the Constitution and any other real property tax
exemption to which the claimant may be entitled.  No other real
property tax exemption may be granted to any other person with
respect to the same residence for which an exemption has been granted
under the provisions of this section; provided, that if two or more
veterans qualified pursuant to this section coown a property in which
they reside, each is entitled to the exemption to the extent of his
or her interest.
   (g) To determine, for taxes that attach as a lien in 2002 and in
each calendar year thereafter, whether the lower or higher exemption
amount governs the amount of an exemption under this section, each
household income amount applied under subdivision (a) or (c) for
taxes that attached a lien during the immediately preceding calendar
year shall be adjusted by an inflation factor that is the percentage
change, rounded to the nearest one-thousandth of 1 percent, from
October of the prior fiscal year to October of the current fiscal
year, in the California Consumer Price Index for all items, as
determined by the California Department of Industrial Relations.
   (h) This section shall become operative on January 1, 2001.
  SEC. 1.5.  Section 205.5 of the Revenue and Taxation Code, as
amended by Section 16.5 of Chapter 1087 of the Statutes of 1996, is
amended to read:
   205.5.  (a) Property that is owned by, and that constitutes the
principal place of residence of, a veteran is exempted from taxation
on that part of the full value of the residence that does not exceed
one hundred thousand dollars ($100,000), if the veteran is blind in
both eyes, has lost the use of two or more limbs, or if the veteran
is totally disabled as a result of injury or disease incurred in
military service.  The one-hundred-thousand-dollar ($100,000)
exemption shall be one hundred fifty thousand dollars ($150,000), in
the case of an eligible veteran whose household income does not
exceed the amount of forty thousand dollars ($40,000), as adjusted
for the relevant assessment year as provided in subdivision (g).
   (b) For purposes of this section, "veteran" means either of the
following:
   (1) A veteran as specified in subdivision (o) of Section 3 of
Article XIII of the Constitution without regard to any limitation
contained therein on the value of property owned by the veteran or
the veteran's spouse.
   (2) Any person who would qualify as a veteran pursuant to
paragraph (1) except that he or she has, as a result of a
service-connected injury or disease died while on active duty in
military service.  The United States Department of Veterans Affairs
shall determine whether an injury or disease is service connected.
   (c) (1) Property that is owned by, and that constitutes the
principal place of residence of, the unmarried surviving spouse of a
veteran is exempt from taxation on that part of the full value of the
residence that does not exceed one hundred thousand dollars
($100,000), in the case of a veteran who was blind in both eyes, had
lost the use of two or more limbs, or was totally disabled provided
that either of the following conditions is met:
   (A) The deceased veteran during his or her lifetime qualified in
all respects for the exemption or would have qualified for the
exemption under the laws effective on January 1, 1977, except that
the veteran died prior to January 1, 1977.
   (B) The veteran died from a disease that was service connected as
determined by the United States Department of Veterans Affairs.
   The one-hundred-thousand-dollar ($100,000) exemption shall be one
hundred fifty thousand dollars ($150,000), in the case of an eligible
unmarried surviving spouse whose household income does not exceed
the amount of forty thousand dollars ($40,000), as adjusted for the
relevant assessment year as provided in subdivision (g).
   (2) Commencing with the 1994-95 fiscal year, property that is
owned by, and that constitutes the principal place of residence of,
the unmarried surviving spouse of a veteran as described in paragraph
(2) of subdivision (b) is exempt from taxation on that part of the
full value of the residence that does not exceed one hundred thousand
dollars ($100,000).  The one-hundred-thousand-dollar ($100,000)
exemption shall be one hundred fifty thousand dollars ($150,000), in
the case of an eligible unmarried surviving spouse whose household
income does not exceed the amount of forty thousand dollars
($40,000), as adjusted for the relevant assessment year as provided
in subdivision (g).
   (d) As used in this section, "property that is owned by a veteran"
or "property that is owned by the veteran's unmarried surviving
spouse" includes all of the following:
   (1) Property owned by the veteran with the veteran's spouse as a
joint tenancy, tenancy in common or as community property.
   (2) Property owned by the veteran or the veteran's spouse as
separate property.
   (3) Property owned with one or more other persons to the extent of
the interest owned by the veteran, the veteran's spouse, or both the
veteran and the veteran's spouse.
   (4) Property owned by the veteran's unmarried surviving spouse
with one or more other persons to the extent of the interest owned by
the veteran's unmarried surviving spouse.
   (5) So much of the property of a corporation as constitutes the
principal place of residence of a veteran or a veteran's unmarried
surviving spouse when the veteran, or the veteran's spouse, or the
veteran's unmarried surviving spouse is a shareholder of the
corporation and the rights of shareholding entitle one to the
possession of property, legal title to which is owned by the
corporation.  The exemption provided by this paragraph shall be shown
on the local roll and shall reduce the full value of the corporate
property.  Notwithstanding any provision of law or articles of
incorporation or bylaws of a corporation described in this paragraph,
any reduction of property taxes paid by the corporation shall
reflect an equal reduction in any charges by the corporation to the
person who, by reason of qualifying for the exemption, made possible
the reduction for the corporation.
   (e) For purposes of this section, being blind in both eyes means
having a visual acuity of 5/200 or less, or concentric contraction of
the visual field to 5 degrees or less; losing the use of a limb
means that the limb has been amputated or its use has been lost by
reason of ankylosis, progressive muscular dystrophies, or paralysis;
and being totally disabled means that the United States Department of
Veterans Affairs or the military service from which the veteran was
discharged has rated the disability at 100 percent or has rated the
disability compensation at 100 percent by reason of being unable to
secure or follow a substantially gainful occupation.
   (f) An exemption granted to a claimant in accordance with the
provisions of this section shall be in lieu of the veteran's
exemption provided by subdivisions (o), (p), (q), and (r) of Section
3 of Article XIII of the Constitution and any other real property tax
exemption to which the claimant may be entitled.  No other real
property tax exemption may be granted to any other person with
respect to the same residence for which an exemption has been granted
under the provisions of this section; provided, that if two or more
veterans qualified pursuant to this section coown a property in which
they reside, each is entitled to the exemption to the extent of his
or her interest.
   (g) To determine, for taxes that attach as a lien in 2002 and in
each calendar year thereafter, whether the lower or higher exemption
amount governs the amount of an exemption under this section, each
household income amount applied under subdivision (a) or (c) for
taxes that attached as a lien during the immediately preceding
calendar year shall be adjusted by an inflation factor that is the
percentage change, rounded to the nearest one-thousandth of 1
percent, from October of the prior fiscal year to October of the
current fiscal year, in the California Consumer Price Index for all
items, as determined by the California Department of Industrial
Relations.
  SEC. 2.  Section 205.5 of the Revenue and Taxation Code, as amended
by Section 17 of Chapter 1087 of the Statutes of 1996, is repealed.

  SEC. 3.  Section 276 of the Revenue and Taxation Code is repealed.

  SEC. 4.  Section 276 is added to the Revenue and Taxation Code, to
read:
   276.  (a) Except as otherwise provided by subdivision (b), for
property for which the disabled veterans' exemption described in
Section 205.5 was available, but for which a timely claim was not
filed, a partial exemption shall be applied in accordance with
whichever of the following is applicable:
   (1) Ninety percent of any tax, including any interest or penalty
thereon, levied upon that portion of the assessed value of the
property that would have been exempt under a timely and appropriate
claim shall be canceled or refunded, provided that an appropriate
claim for exemption is filed after 5 p.m. on February 15 of the
calendar year in which the fiscal year begins but on or before the
following December 10.
   (2) If an appropriate claim for exemption is filed after the time
period specified in paragraph (1), 85 percent of that portion of any
tax, including any interest or penalty thereon, that was levied upon
that portion of the assessed value of the property that would have
been exempt under a timely and appropriate claim, shall be canceled
or refunded.  Cancellations or refunds made or issued under this
paragraph are subject to the limitations periods on refunds as
described in Section 5096.
   (b) If a late filed claim for the sixty-thousand-dollar ($60,000)
exemption is filed in conjunction with a timely filed claim for the
forty-thousand-dollar ($40,000) exemption, or if a late filed claim
for the one-hundred-fifty-thousand dollar ($150,000) exemption is
filed in conjunction with a timely filed claim for the
one-hundred-thousand-dollar ($100,000) exemption, the amount of any
exemption allowed under the late-filed claim under subdivision (a)
shall be determined on the basis of that portion of the exemption
amount, otherwise available under subdivision (a), that exceeds forty
thousand dollars ($40,000) or one hundred thousand dollars
($100,000), as applicable.
   (c) For those claims filed pursuant to subdivision (a) after
November 15, the exemption under that subdivision may be applied to
the second installment.  If that exemption is so applied, the first
installment is still delinquent on December 10, and is subject to
delinquent penalties provided for in this division if that
installment is not timely paid.  A refund shall be made to the
taxpayer upon a claim submitted to the auditor if the exemption is
applied to the second installment and either of the following is
true:
   (1) Both installments are paid on or before December 10.
   (2) The reduction in taxes resulting from the exemption exceeds
the amount of taxes due on the second installment.
  SEC. 5.  Section 276.1 is added to the Revenue and Taxation Code,
to read:
   276.1.  For property for which the disabled veterans' exemption
described in Section 205.5 would have been available but for the
taxpayer's failure to receive a timely disability rating from the
United States Department of Veterans Affairs (USDVA), there shall be
canceled or refunded the amount of any taxes, including any interest
and penalties thereon, levied on that portion of the assessed value
of the property that would have been exempt under a timely and
appropriate claim, provided that the claimant meets both of the
following conditions:
   (a) The claimant had an application pending with the USDVA for a
disability rating and subsequently received a rating that qualifies
the claimant for the disabled veterans' exemption described in
Section 205.5.
   (b) The claimant subsequently files an appropriate claim for the
disabled veterans' exemption described in Section 205.5 on or before
the next following lien date.
  SEC. 6.  Section 276.2 is added to the Revenue and Taxation Code,
to read:
   276.2.  If the disabled veterans' exemption as described in
Section 205.5 would have been available for a property, but for that
property being acquired by a person eligible for the exemption only
after the lien date, and an appropriate application for that
exemption is filed on or before the lien date in the calendar year
next following the calendar year in which the property was acquired,
there shall be canceled or refunded the amount of any taxes,
including any interest and penalties thereon, levied on that portion
of the assessed value of the property that would have been exempt
under a timely and appropriate application.
  SEC. 7.  Section 276.3 is added to the Revenue and Taxation Code,
to read:
   276.3.  In the event that property receiving a disabled veterans'
exemption as described in Section 205.5 is sold or otherwise
transferred to a person that is not eligible for that exemption, the
exemption shall cease to apply on the date of that sale or transfer.

  SEC. 8.  Sections 1.5 and 2 of this bill incorporate amendments to
Section 205.5 of the Revenue and Taxation Code proposed by both this
bill and SB 2195.  Sections 1.5 and 2 of this bill shall only become
operative if (1) both bills are enacted and become effective on or
before January 1, 2001, (2) each bill amends Section 205.5 of the
Revenue and Taxation Code, and (3) this bill is enacted after SB
2195, in which case Section 1 of this bill shall not become
operative.
  SEC. 9.  Notwithstanding Section 2229 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any property tax revenues lost by it
pursuant to this act.
  SEC. 10.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
